TXA Ltd acquired a machine from Blue Ltd for the following consideration:

Cash $70, 000

Land in the books of TXA Ltd the land is recorded at its cost of $650,000.

It has a fair value of $450,000.

TXA Ltd also agrees to assume the liability of the Blue Ltd bank loan of $89,000 as part of the

machine acquisition.

Required:

(a) Calculate the acquisition cost of the machine. (2 marks)

(b) Provide the journal entries that would appear in TXA Ltd.'s books to account for the

acquisition of the Machine